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Managing energy expenses during a crisis: Things to consider

PayPal Editorial Staff

PayPal Editorial Staff

27 May 2024

27 May 2024

Managing energy bills can become a significant concern in times of economic uncertainty. This article aims to provide valuable insights into efficient energy management during a crisis.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

This guide explores practical strategies for reducing energy consumption and tips on managing bill payments effectively.

Understanding energy bills

Energy bills generally include charges for usage, supply, and any additional fees. Here’s a breakdown of potential tariff structures for energy bills:

  • Fixed energy tariff: This offers a consistent rate for energy over a certain period. The potential benefit is the predictability of costs, which can make budgeting easy. However, people may miss out on low rates if market prices fall.
  • Variable tariffs: These tariffs fluctuate based on market conditions. While there's potential for savings when energy prices drop, there's also a risk of high costs when prices rise.
  • Dual fuel tariffs: Opting for dual fuel tariffs means getting both gas and electricity from the same supplier, often at a discounted rate. This can simplify billing, but it's important to compare if separate deals may yield more savings.

Energy usage assessment

Conducting a home energy audit can help individuals better understand and manage energy consumption, especially during financially challenging times. This process may involve assessing how much energy a home uses and identifying opportunities to make it more energy efficient.

  • Do-it-yourself (DIY) home energy assessment: For those who prefer a more hands-on approach, DIY audits can be a cost-effective way to analyse energy use. While less comprehensive than professional audits, they can still highlight major areas of energy waste.

Tips on how to budget and manage your money

Effectively budgeting for energy expenses can make a difference, particularly during a cost-of-living crisis. Understanding and anticipating monthly energy bills can allow for more accurate budgeting.

Effective budgeting also involves exploring various payment options, like using digital wallets for convenience and tracking. Learn more about the PayPal digital wallet.

Tips on how to manage energy expenses

Strategically managing energy expenses is important. Explore these six tips to get started:

  1. Conduct a home energy audit

    A home energy audit is important in controlling energy expenses. It may involve:

    • Identifying inefficient appliances: Check for outdated or high-energy-consuming devices.
    • Evaluating insulation: Understand if proper insulation is already in place to minimise heating and cooling losses, engaging a professional if required as the long-term benefits may make a difference.
    • Inspecting heating and cooling systems: Understand their efficiency and impact on energy consumption, again engaging a professional if required to ensure all is in order.

  2. Implement energy-efficient measures

    Reducing energy consumption may be achieved through:

    • Renewable energy options: Consider solar panels or other renewable energy sources.
    • Energy-efficient appliances: Transition to energy-saving light bulbs and appliances.
    • Unplugging devices: Disconnect electronics when not in use.
    • Sealing drafts: Insulate windows and doors to maintain temperature.
    • Optimising thermostat settings: Set thermostats to energy-efficient temperatures.

  3. Research and compare energy providers

    Comparing energy providers and tariffs can lead to savings. Using online comparison tools may help in understanding the best options based on specific energy needs and consumption patterns.

  4. Take advantage of government assistance programs

    Various government schemes, grants, and subsidies may be available to support energy efficiency and assist households. Individuals can research relevant options and explore requirements.

  5. Create a budget for energy expenses

    Developing a budget for energy expenses may help monitor and control monthly costs. Allocating funds based on income and prioritising essential energy needs can prevent unexpected financial burdens. Learn more on how to budget.

  6. Communicate with the energy provider

    Communicating with energy providers may be beneficial, especially during a crisis. Providers often offer flexible payment plans and assistance programs. It's important to inform them of any financial hardships, discuss payment options, and inquire about special programs or relief measures available.

    These steps may help to manage energy expenses, even during challenging economic periods.

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